Construction Partners (ROAD) Raymond James & Associates’ 46th Annual Institutional Investors Conference 2025 summary

Business model and market positioning

• Operates as a vertically integrated civil engineering contractor focused on asphalt, with a strong presence in the Sun Belt region, including recent expansions into Texas and Oklahoma.

• Local market focus is key, with management teams and workforces embedded in specific regions, enabling recurring business and deep customer relationships.

• Asphalt's physical properties create natural geographic market boundaries, limiting competition to local players and supporting organic growth.

Vertical integration and margin strategy

• Vertically integrated in both aggregates and liquid asphalt, using storage and direct sourcing to capture margin between wholesale and retail.

• Margin growth targets are 50-60 basis points per year, driven by better bidding, vertical integration, and scale.

• Not all markets require aggregate integration; partnerships with major suppliers are common, with a focus on consolidating the infrastructure contractor market.

• Plans to add more liquid asphalt terminals as plant density increases in certain regions.

Revenue mix and market dynamics

• Revenue is consistently about 65% public work and 35% private/commercial, with flexibility to shift focus based on market conditions.

• Minimal exposure to residential work due to lower margins and higher competition.

• Roads require resurfacing roughly every 10 years, ensuring recurring demand.